Earth Sciences Geostatistics

Timely information on a company's production activities is crucial for investors and policymakers, yet it remains scarce as financial reports and other broader economic indicators like the Purchasing Managers' Index (PMI) are only released periodically. This information lag makes it difficult to assess a company's operational health in real time. To address this challenge, Prof Zhao Xiaofeng, Associate Professor of the Department of Finance and Associate Director of Hong Kong Institute of Business Studies at Lingnan University, in collaboration with researchers from the Huazhong University of Science and Technology and The Chinese University of Hong Kong, Shenzhen, has developed a new economic indicator, which uses thermal infrared radiation data to monitor the production and operation of enterprises in real time, and accurately predicts changes in their future profitability in terms of sales growth. The findings were recently featured in the prestigious international finance journal “Journal of Financial and Quantitative Analysis”, and received support from the General Research Fund (GRF) of the Hong Kong Research Grants Council (RGC) amounting to about HKD$400,000.